Prosperity Watch Issue 31, No. 3: Community colleges see reduction in state dollars through formula change

During the course of the Great Recession and recovery, state policymakers fully funded community college enrollment growth according to a formula that looked at the past three years of enrollment. This was an important recognition that the open-door mandate of the community college system and the failure of the economy to rebound quickly was increasing demand for retraining and credentials. 

In this year’s budget, an important change to the way that community college funding is allocated was made by changing the period over which enrollment would be looked at for allocation purposes from three years to two.  The effect of these changes results in nearly 2 percent less in overall funding for the 58 community colleges in the system with the impact on colleges varying based on their experience of enrollment spikes during the downturn and subsequent recovery.

In the midst of the current sluggish recovery and an overall investment by the state in community colleges that falls 1.6 percent short of what is needed to maintain current service levels, this will reduce the allocations to those schools that experienced the greatest pressure from student enrollment.  That means that even as enrollment levels stabilize at a lower level, community colleges will struggle to serve students in communities that have been hardest hit.  They will also not have the resources to fully orient their programming and services to help many of the students who are in need of retraining and new career orientation.

The following map shows the distribution of funding change across the state as a result of these enrollment formula changes.

The map shows that most community colleges will see a reduction in their funding as a result of this change.  Those with the greatest reduction are in areas where industry was hardest hit and the economy has been slowest to recover. 

In order to fulfill its mission of funding the education and skills training for the jobs of the future for a range of students who are often adults returning for credentials, getting the formula for funding community colleges right is critical.  Making sure that formula funding changes allow community colleges to serve increased demand during downturns is fundamental to that mission but the change to the look back period alone won’t better position community colleges to fund skills training through the business cycle and the ebbs and flows of students through their open doors.

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